Problem 5-9 (Algo) Noninterest-bearing note; annuity and lump-sum payment [LO5-3, 5-8]On January 1, 2024, The Barrel Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiringfive annual payments of $35,000 on each December 31 beginning on December 31, 2024, and a lump-sum payment of $250,000 onDecember 31, 2028. A 12% interest rate properly reflects the time value of money in this situation.Required:Calculate the amount at which Barrel should record the note payable and corresponding merchandise purchased on January 1, 2024.Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVAof $1, PVA of $1, FVAD of $1 and PVAD of $1)Time values are based on:n =Cash Flowi=AmountPresent ValuePaymentsLump SumAmount recorded

Note: I used 5 decimal places in the PV factor. Step 1: In computing for the Present Value, it is…

Answered: Problem 5-9 (Algo) Noninterest-bearing…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 98PSB

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Problem 1 On September 1, 2020, Rayhak Company assigned specific receivables totaling to P750,000 to Pak Bank as a collateral on a P625,000, 12% loan. Rayhak will continue to collect the assigned accounts receivable. The bank also assessed a 2% service charge on the total accounts receivable assigned. Rayhak is to make monthly payments to the bank with the cash collected on the assigned accounts receivable. Collections of assigned account during September 2020totaled P260,000 gross of cash discounts amounting to P3,500. Prepare all the e journal entries relating to the problem for the month of September 2020. (Books of Rayhak)
Accounts receivable, net of P520,000 allowance 5:49 "il ll 674 est doubtful accou... On June 1, 2018, Yola Company loaned Dale P500,000 on a 12% note, payable in five annual installments of P100,000 beginning January 1, 2019. In connection with this loan, Dale was required to deposit P5,000 in a noninterest-bearing escrow account. The amount held in escrow is to be returned to Dale after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2018. Dale made timely payments through November 1, 2018. On January 1, 2019, Yola received payment of the first principal installment plus all interest due. On December 31,2018, what is the accrued interest receivable on the note receivable? 3. 5,000 c. · 10,000 d. 15,000 b. ua Company reported the following receivables on December 31, 2018: for doubtful accounts Interest receivable ..Lle 3,840,000 190,000 A 000 00
Problem 5-8A (Algo) Record long-term notes receivable and interest revenue (LO5-7) On December 1, 2024, Liang Chemical provides services to a customer for $78,000. In payment for the services, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each December 1. Required: 1. Record the acceptance of the note on December 1, 2024. 2. Record the adjusting entry for interest revenue on December 31 for 2024, 2025, and 2026, and the collection of annual interest on December 1, 2025 and 2026 3. Record the cash collection on December 1, 2027. Prepare the journal entries for the above transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 Record the acceptance of the note. Note: Enter debits before credits. Date December 01, 2024 Record entry View transaction list 4 Date December 01, 2026 5…
Q#5 . On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $22,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $120,000 on December 31, 2025. A 12% interest rate properly reflects the time value of money in this situation. ((FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Required:Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021. (Round your final answer to nearest whole dollar amount.) Table values are based on: n = i = Cash Flow Amount Present Value Payments Lump Sum Amount recorded
Problem 9-6 (IAA) On January 1, 2020, Machete Company sold land with carrying amount of P1,500,000 in exchange for a 9-month, 10% note with face value of P2,000,000. The 10% rate properly reflects the time value of money for this type of note. On April 1, 2020, the entity discounted the note with recourse. The bank discount rate is 12%. The discounting transaction is accounted for as a secured borrowing. On October 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P10,000. On December 31, 2020, the entity collected the dishonored note receivable in full plus 12% annual interest on the total amount due. Required: Prepare journal entries to record the transactions. 265
Brief Exercise 9-3 (Algo) Interpret an amortization schedule for an installment note (LO9-2) Presented below is a partial amortization schedule for a three-year installment note requiring monthly payments of $1,363.13. (4) Decrease in Carrying Value (2) (3) (1) Date (2) Cash Paid (3) Interest Expense Carrying Value x Interest Rate. 11/1/2024 11/30/2024 $1,363.13 12/31/2024 1,363.13 10/31/2027 1,363.13 1. What is the principal amount of the note? 2. What is the total number of monthly payments? 1. Principal amount 2. Total number of monthly payments $290.00 282.85 9.03 $1,073.13 1,080.28 1,354.10 (5) Carrying Value Prior Carrying Value (4) $43,500.00 42,426.87 41,346.59 8 3. What is the total cash paid over the entire period of the note? (Round your answer to 2 decimal places.) 4. What is the total amount of interest paid over the entire period of the note? (Do not round your intermediate calculations. Round your answer to 2 decimal places.) 5. The portion of the monthly payment that…
Problem 7-9 (IFRS) Moderate Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount Direct origination cost incurred Indirect origination cost incurred Origination fee received from the borrower 5,000,000 100,000 50,000 340,000 After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loa is 12%. 1. What is the carrying amount of the loan receivable on January 1, 2020? a. 4,760,000 b. 5,000,000 c. 4,810,000 d. 4,660,000 2. What is the interest income for 2020? a. 571,200 b. 500,000 c. 476,000 d. 547,200 3. What is the carrying amount of the loan receivable on December 31, 2020? a. 5,000,000 b. 4,760,000 c. 4,831,200 d. 4,910,944 तत 215
Exercise 9-2 (Algo) Record installment notes (LO9-2) On January 1, 2024, Royal Paradise borrows $42,000 by agreeing to a 5%, four-year note with the bank. Loan payments of $967.23 are due at the end of each month with the first installment due on January 31, 2024. Required: Record the issuance of the installment note payable and the first two monthly payments. (Do not round intermediate calculations. Round your final answers to 2 decimal places. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) No 1 2 3 Date January 01, 2024 Cash Answer is complete but not entirely correct. General Journal Notes Payable January 31, 2024 Interest Expense Notes Payable Cash February 29, 2024 Interest Expense Notes Payable Cash ✓ ✓ ✓ ✓ ✓ *** Debit 42,000.00 175.00✔ 792.23✔ 170.97 X 796.26 X Credit 42,000.00✔ 967.23✔ 967.23✔
Problem 7-2 (IFRS) Awesome Bank granted a loan to a borrower on January 1, 2021. The interest rate on the loan is 10% payable annually starting December 31, 2021. The loan matures in five years On December 31, 2025. Principal amount Direct origination cost Origination fee received from borrower 4,000,000 61,500 350,000 The effective rate on the loan after considering the direct origination cost and origination fee received is 12%. Required: 1. Compute the carrying amount of the loan receivable or January 1, 2021. 2. Prepare a table of amortization for the loan receivable. 3. Prepare the journal entries for 2021 and 2022.
Problem 7-4 (IFRS) On January 1, 2019, Empress Bank granted a loan to a borrower. The interest on the loan is 10% payable annually on December 31, 2019. The loan matures in three years on December 31, 2021. Principal amount Direct origination cost incurred Origination fee charged against the borrower 5,000,000 457,500 200,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 8%. Required: 1. Determine the carrying amount of the loan on January 1, 2019. 2. Prepare a table of amortization of the direct origination cost. 3. Prepare journal entries for 2019, 2020 and 2021.
On January 1, 2021, VKS Corporation sold goods to IntAcc2 Company. IntAcc2 signed a noninterest-bearing note requiring payment of P600,000 annually for seven years. The first payment was made on January 1, 2021.The prevailing rate of interest for this type of note at date of issuance was 10%.· PV of an ordinary annuity of 1 at 10% for 6 period- 4.36· PV of an ordinary annuity of 1 at 10% for 7 period- 4.87What is the carrying amount of the note receivable on January 1, 2021?
Problem 9-12 (IAA) On April 1, 2020, Aljean Company discounted with recourse a 9-month, 10% note dated January 1, 2020 with face amount of P6,000,000. The bank discount rate is 12%. The discounting transaction is accounted for as a conditional sale with recognition of contingent liability. On October 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P50,000. On December 31, 2020, the entity collected the dishonored note receivable in full plus 12% annual interest on the total amount due. 1. What amount was received from the note receivable discounting on April 1, 2020? a. 6,063,000 b. 6,450,000 c. 6,150,000 d. 5,963,000 2. What amount should be recognized as loss on note receivable discounting? 450,000 b. 387,000 87,000 d. а. с. 63,000 3. What is the total amount collected from the customer on December 31, 2020? а. 6,450,000 b. 6,500,000 c. 6,695,000 d. 6,662,500 4. If the discounting is secured borrowing,…

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